Which of the following models view changes in real supply-side factors as determinants of short-run fluctuations in output and employment?
a. New classical models
b. Political business cycle models
c. Keynesian models
d. Real business cycle models
e. none of the above
Question 2
According to supply-side theory, if one starts from a balanced budget, a cut in taxes will tend to cause ________.
A) a budget deficit
B) no change in the federal government budget
C) a decrease in aggregate supply and an increase in aggregate demand
D) a budget surplus
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